Master Circular on Remittance Facilities for NRIs/PIOs/Foreign Nationals (2008)

6.1 Repatriation of sale proceeds of residential property purchased by NRI / PIO is permitted to the extent of the amount paid for acquisition of immovable property in foreign exchange received through banking channels. The facility is restricted to not more than two such properties. 6.2 Authorised dealer banks may permit repatriation of amounts representing the refund of application / earnest money / purchase consideration made by the house building agencies / seller on account of non-allotment of flat / plot / cancellation of bookings / deals for purchase of residential / commercial property, together with interest, if any (net of income tax payable thereon), provided the original payment was made out of NRE / FCNR (B) account of the account holder, or remittance from outside India through normal banking channels and the authorised dealer bank is satisfied about the genuineness of the transaction. Such funds may also be credited to the NRE / FCNR (B) account of the NRI / PIO, if they so desire. 6.3 Authorised dealer banks may allow repatriation of sale proceeds of residential accommodation purchased by NRIs/PIO out of funds raised by them by way of loans from the authorized dealer banks / housing finance institutions to the extent of such loan/s repaid by them out of foreign inward remittances received through normal banking channel or by debit to their NRE / FCNR (B) account. 6.4 Authorisation to Regional Rural Banks (RRBs): With a view to make foreign exchange services available to the NRIs/PIO on a wider scale, RRBs are now authorised to open and maintain FCNR (B) Deposit accounts also by NRIs/PIO. 6.5. Repatriation of maturity proceeds of FCNR (B) deposits: AD Category-I banks and authorised banks are permitted to make remittance of the maturity proceeds of FCNR (B) deposits to the third parties outside India, provided the transaction is specifically authorised by the account holder and the authorised dealer is satisfied about the bonafides of the transaction. 6.6 ESOP to NRI Employees: Authorised dealers are permitted to grant Rupee loans to NRIs employees of Indian companies for acquiring shares of the companies under the ESOP Scheme. The loan scheme should be as per the policy approved by the bank’s Board and would further be subject to the conditions indicated in AP (DIR Series) Circular No. 7 dated August 22, 2007.

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-2008/243 · issued 21 Feb 2008. The plain-English explanation above is BankPulse’s own independent summary.

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